Recent experiments have shown that supercritical water (SCW) has the ability to accelerate and make selective synthetic organic reactions, thus replacing the common but environmentally harmful acid and basic catalysts. In an attempt to understand the intimate mechanism behind this observation, we analyze, via first-principles molecular dynamics, the Beckmann rearrangement of cyclohexanone oxime into epsilon-caprolactam in supercritical water, for which accurate experimental evidence has been reported. Differences in the wetting of the hydrophilic parts of the solute, enhanced by SCW, and the disrupted hydrogen bond network are shown to be crucial in triggering the reaction and in making it selective. Furthermore, the enhanced concentrations of H+ in SCW play an important role in starting the reaction.